PELHAM, Alabama - Pelham Mayor Gary Waters said tonight's
City Council approval of the first comprehensive revision of the employee pay
plan since 1984 should bring an end to one worker lawsuit filed against the
municipality over compensation.

The council's unanimous approval of the new employee compensation
plan created by the three-member personnel board through months of evaluations
and data-gathering of comparable salaries is a critical component of the
settlement in what's been known as the Collins lawsuit.

Tonight's approval means the new pay structure will go
into effect Aug. 17 and subsequently result in removal of the controversial
compensation plan that resulted from what's called the Mercer study, which is not related to Councilman Maurice Mercer.

"The centerpiece of the Collins lawsuit ... was that we
rescind the Mercer pay plan," Waters said in an interview tonight. "This will
forever rescind the Mercer pay plan."

The council in January approved a roughly $100,000 settlement
in the lawsuit filed by City of Pelham personnel board members Jim Collins and
James Burks and a group of employees about a year earlier in 2012. The
settlement will result in payments for the 16 employees named in the lawsuit
that challenged the municipality's compensation plan.

The approval of the new compensation plan came with
applause from the few dozen audience members and a "hallelujah" from Waters, who called the document the city's
first salary plan that included input from all levels of municipal government.

"This pay plan ... is not in conflict with our civil
service law. That is the main reason we should do this," Waters told the
audience at the council meeting.

The pay plan affects all of the city's employees and will
cost roughly $778,000 to implement, but the new benefit structure and
classification system utilizes the $970,000 in savings that resulted from the
elimination of 32 part-time and full-time positions over the revision process
that started several months ago.

Waters noted the city's employee pay will be
roughly $192,000 less than the amount under the previous compensation
structure.

Collins and fellow Personnel Board member Greg Darnell
addressed the council and the audience at tonight's meeting about the new plan. The
board's other member, former mayor Bobby Hayes, did not attend.

The pay plan the last several years "was basically a
direct conflict with the civil service law that Pelham operates under," Collins
said.

The new pay structure means no employee is losing money,
he added. "We set the salaries that were appropriate to the studies that were
done. ... We're comfortable with the supporting data that went into the plan," he
said.

Darnell said the Personnel Board had salary studies that
were outdated, so the group sought data from 10 neighboring governments that
compete for workers including Hoover, Vestavia, Irondale, Gardendale and various ones in Shelby
County.

"Based on that kind of competitive data ... we're able to
look and decide then what Pelham's pay classification should be," he said,
noting the group used roughly the 75th percentile from the wages gathered from
the neighboring markets for the 120 to 130 different employee classifications.

In the case of the Pelham Civic Complex and Ice Arena,
the Racquet Club and Ballantrae Golf Course, the board looked at similar
facilities in other markets such as Nashville, Atlanta and Huntsville.

"It's not just a number that some consultant has given us
in some study," Darnell said. "We have a lot of confidence in the work that has
been done."

He added, "It may not be a perfect plan at present, but it's 99 percent there. ... We will keep
working on it. We will keep changing it."

Waters called the pay plan a "living document" that is
subject to ongoing revision as needed. Among the other reasons for approving
the plan, he said it "restores equity to the municipal pay plan."

"It eliminated classifications that were no longer needed
and created classifications that were needed," he said.